The nation has now fallen into a severe debt trap as a result of the failure of succeeding governments to enact reforms aimed at reducing the high budget deficit by increasing revenues and eliminating unnecessary spending. This has forced the government to take on more debt in order to make up the difference in funding and settle existing debt.It makes sense, given that total external and domestic loans and liabilities increased from $145.7 billion to $271 billion between 2011 and 2011, that Pakistan’s external debt has nearly doubled to $124.6 billion and its domestic debt has grown six-fold in nominal terms to $146.4 billion. This indicates that during the same period, per capita GDP decreased by 6%, from $1,295 to $1,224, while per capita debt increased by 36%, from $823 to $1,123. The government must implement reforms to address Pakistan’s long-standing issues if it hopes to lower the country’s debt load and free up funds for demands related to social protection, health, education, and climate-related disasters and adaptation plans. When negotiations for a new loan from the IMF begin, the next government’s commitment to enacting reforms to control the enormous debt and stabilize the economy will be put to the test.

Source: The Patriot February 24, 2024 01:31 UTC